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Juncker: Italy budget deviation from EU rules unacceptable

ROME — Italy's budget is likely to be returned to the sender by the European Commission.

Commission President Jean-Claude Juncker said Tuesday in an interview with the Italian news agency ANSA that there would be a "violent reaction" from other eurozone countries if Brussels were to accept Rome's proposals. However, the EU's top official underlined that "warnings were given possibly prematurely, but nothing has been decided so far and everything will depend on what comes out of our conversations with the Italian government."

Junker went on to say: "Italians understand things well, and they know they can't keep spending more than what they have in the state's coffer. It's common sense."

Meanwhile, Claudio Borghi, a Euroskeptic economist and top League MP, called for Brussels and Rome to tone down their rhetoric and end their "war of words."

"I do hope that good sense will prevail, and everyone will notice that this kind of budget is exactly what Italy needs to cope with its chronic lack of growth," Borghi said in an interview with CNBC on Tuesday.

One senior Commission official told POLITICO that the situation is "tricky" because on the one hand, Brussels doesn't want a full-fledged clash with the Italian government but on the other, "it's impossible to green light a budget like this one."

Italy's budget draft presented to Brussels late Monday night confirms the League and the 5Stars coalition's intention to borrow more to finance their expensive campaign promises.

The Commission now has two weeks to respond. Meanwhile, rating actions on Italy's sovereign debt by Moody's and Standard and Poor's are scheduled for next week.